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Britain’s 20th-century industrial revolution

Why the old story of postwar British industrial decline is a myth.

By Colin Kidd

Every so often a book comes along that the entire political class needs to read. In the early Eighties Keith Joseph, Margaret Thatcher’s closest ministerial ally, was captivated by Martin Wiener’s English Culture and the Decline of the Industrial Spirit (1981), which blamed the anti-industrial ethos of the English elite for the country’s economic malaise. Joseph found the book so stimulating and provocative that he gave a copy to every member of the Cabinet. Wiener’s message was reinforced a few years later in Correlli Barnett’s The Audit of War (1986), which, according to a diary entry in 1988 of a delighted Alan Clark, even the hard-pressed prime minister had found time to read.

Wiener and Barnett purveyed an influential narrative of self-inflicted economic decline, depicting a country whose leaders – entranced by rural nostalgia and ideals of gentility inculcated in the public schools – failed to promote scientific education or to invest in industrial research and development. In particular, complained Barnett, the New Jerusalem of Labour’s postwar welfare state diverted energies away from a necessary overhaul of Britain’s manufacturing capability.

David Edgerton’s new history of 20th-century Britain punctures and complicates this familiar saga of absent technocracy and long-term industrial decline. Edgerton is Britain’s most exciting and arresting late-modern historian. In a series of incisive, polemically charged and formidably researched books, on topics ranging from English aviation to the Second World War, he has thoroughly defamiliarised the seemingly well-known contours of our recent past. His latest book, appearing on the eve of Brexit, challenges many of the fundamental preconceptions of Brexiteers and Remainers alike. There are no briskly dispensed panaceas here: this is political economy for grown-ups.

Edgerton asks searching questions about the ultimate purposes of an economy. Instead of fixating on supply-side glories, he explores how Britain in the past century obtained its basic requirements of food and energy. Consumption – by individuals, companies and the state – is, rightly, as much an integral part of his story as production or capital accumulation. Edgerton wants us to dispense with “the manufacturing-oriented fables” we have become accustomed to telling ourselves. These just-so stories have distorted our understanding of how the British economy has actually functioned.

Just as significant in any serious consideration of the economy is the character and quantity of what has to be imported. Exports are not just a talisman of economic virility; they bear a rational – though sometimes surprising – relationship to the scale, costs and nature of what has to be imported to meet our needs. Edgerton rejects the canard that it was the misdirection of energies and investments into the empire that dangerously retarded Britain’s industrial modernisation at home. Not only are the explanations advanced by the declinist school of history unconvincing, argues Edgerton, their very assumption of long-term industrial decline is a mirage. There is “no failure of manufacturing to explain” before the 1970s.

Edgerton divides British economic life in the 20th century into three sharply different phases: the internationalised economy of the pre-Second World War era, the “nationalist” export-oriented phase in the third quarter of the century and, since the 1980s, the eclipse of manufacturing and the return to an economy whose underlying patterns of consumption bear some resemblance – though vastly different in content and controlling finance – to the situation in the pre-war era.

In the world of 1900 Britain’s economy was thoroughly internationalised, not simply as a result of empire or limited to it, but because of the country’s dominant free trade ethos and the peculiarities of Britain’s economic development. In a striking departure from global norms in those days, the world fed an urbanised Britain. Indeed, it is central to Edgerton’s argument that the Britain of 1900 did not function like a nation as such, but as the cosmopolitan hub of an international economy.

UK companies – and in the following decades Anglo-Dutch firms – engaged in global operations, and most of Britain’s trade was outside the empire. Iron ore and timber came from Europe, and cotton from the United States supplied the UK’s textile sector. The Britain of 1900 had as many colliers as farmhands, was the largest importer of food in the world, and the largest exporter of energy, in the form of coal. British coal was so widely exported because the proximity of its coalfields to the sea gave the country an advantage over competitors.

Mutton came from the southern Empire in Australasia, but Britain’s beef consumption was provided in good part from the cattle of the pampas around the River Plate in Argentina. The Bovril Company owned 1.5 million acres of the Argentine province of Entre Ríos, and the Vestey family controlled an integrated international food market that depended on the transportation in fast ships of chilled beef from Argentina. It is perhaps significant that Edgerton has some affinity with that lost Anglo-Argentinian-Uruguayan world; he was brought up in Montevideo and Buenos Aires, only coming to Britain when he was 11.

However, this internationalist free trade model did not go unchallenged. Edgerton depicts a three-way struggle in which, first, imperial preference and, then, after the Second World War, a UK-focused protectionism, challenged the dominant internationalist orthodoxy of free trade. Inter-war Tories began to drift towards protection under the influence of the Canadian press baron Lord Beaverbrook and, as Chancellor, Neville Chamberlain, son of the original proponent of a socially-progressive tariff-protected empire, Joseph Chamberlain. The inter-war Labour Party comes into surprising focus as a free trade party – the party of affordable food for the workers. Alongside the Liberals, Labour opposed the imperial protectionism of the Tories.

Sugar was an exception to this broad sequence of developments, but a portent of things to come. In 1900, 80 per cent of Britain’s sugar came from beet growers on the Continent. However, there were challenges to this dependence, both from imperialists who wondered why Britain could not source its sugar from its own colonies in the Caribbean and from nationalists who advocated agrarian self-sufficiency. Here the turn to the nation began earlier than in other sectors of the economy, with the National Sugar Beet Association set up in 1909.

There was something distinctive too about how Britain waged war. It was global, capital-intensive, and reliant on the latest mechanised armaments. And this was as true in the Second World War as in the early 20th century. Edgerton is keen to puncture the lazy but seemingly ineradicable myth that in 1940 Britain stood alone. Britain was not only supported by its empire but also by European governments in exile and what they could control of their own merchant navies and overseas empires. Moreover, Britain’s war effort in the early 1940s continued the cosmopolitan patterns of trade characteristic of the pre-war economy, albeit with some adjustments to take account of the loss of Continental provisions, such as iron ore, timber, bacon, and eggs. More meat, for example, now came frozen or canned. The UK, Edgerton persuasively insists, “did not turn in on itself” to fight the war; rather, it “connected to the world in new ways”.

However, victory came at enormous cost, and the viability of a global-imperial economy in which the Royal Navy ruled the waves came into question in 1942, with the Japanese overthrow of the empire in Malaya. Edgerton – who never shirks an opportunity for provocation – describes the postwar UK as “one of the new nations which arose from the dissolution of the one empire”.

In the third quarter of the 20th century Britain became more like a normal European nation which, conscious of its wartime vulnerabilities, organised its economy on explicitly national lines. There were now concerted efforts to make the nation self-sufficient in foodstuffs, and oil was increasingly refined at home rather than in British-owned overseas refineries. Hence the “rise of the nation” alluded to in Edgerton’s enigmatic title. In 1945 Britain became a nation in the sense that there was now a distinctive economic unit within the borders of the UK.

After the Second World War, an export drive was required simply to pay for imports of necessities. Once the Americans withdrew the lend-lease aid programme, manufacturing had to make up a glaring financial gap. A measure of protection was required to develop industries and to inhibit home consumption. Post-1945 Britain was, in Edgerton’s words, “a land of tariffs, quotas, import surcharges”. By the late 1940s both of the main parties had become discreetly protectionist. Under external pressures, postwar Britain had junked its old economy, and utterly reinvented itself as an export-oriented industrial power. Other new patterns emerged. Earlier in the century – at the zenith of empire – Britain traded more with Europe than with its imperial possessions. But now, as the empire declined, imperial trade grew. One of the many ironies in a volume bursting with ironic aperçus is that Britain’s trade with Empire and Commonwealth was heavier during the 1950s than at the height of empire.

Postwar Britain – far from the declining industrial giant of economic folklore – became more industrial than ever before, and successfully so. In 1950, 22 per cent of the world’s manufacturing exports came from the UK. In the same year the UK was already the largest car maker in Europe, with production peaking in the UK in 1972. Britain, Edgerton argues, was more industrial in 1950 than in 1900 or 1850. Britain was not only the first industrial nation, but also continued to be a successful industrialising nation.

Other aspects of the Attlee government have gone unnoticed, Edgerton contends. The post-1945 Labour government built not only the “new Jerusalem” of its welfare state, but also a “new Sparta”, a military leviathan, with – another European feature – a peacetime conscript army. Nor should we exaggerate the novelty of the welfare state, which, Edgerton argues, was in many respects an “extension” of the existing pre-war system of welfare provision.

The “fall” of Britain and her industries occurred only from the 1970s onwards when the barriers protecting Britain’s unsung postwar industrial miracle were opened with entry into the European Economic Community. But did this matter? After all, most modern countries have seen increases in manufacturing output, along with decreases in manufacturing employment and manufacturing’s share of GDP; and supply chains of parts routinely cross national borders. Besides, Thatcher’s Britain had no need to remain top dog in manufacturing; for it was now no longer necessary to export manufactured goods in order to pay for imports of energy and foodstuffs on a grand scale. The advent of North Sea oil and gas from the late 1970s had changed everything again.

By the Thatcher era Britain – “uniquely” in her modern history – was “self-sufficient in food” and, for the first time since 1939, “a net exporter of energy”. Therefore, the country no longer had to export manufactured products to balance imports of food and energy: “The basic relations of the economy to the rest of the world had changed.” But do any of us properly understand even our own recent past? As Edgerton notes, “this epochal transformation” has “barely registered”, either in political argument or in historical analysis.

However, the new strain of international capitalism of the post-Thatcher era has been different in character from the pre-1939 variety. Whereas British capital had once owned a range of “things” across the globe – infrastructure, farms, abattoirs, ships, overseas refineries – the new post-Thatcherite City of London was merely a place where money traded.

The book makes uncomfortable reading for all groupings at Westminster. Edgerton denounces the “folly” of assuming the historic and continuous distinctiveness of UK plc. There are no deep-seated continuities for Brexiteers to preserve. On the other hand, Remainers will see that the British economy has changed direction drastically more than once in the course of the last century. We have – under force of circumstances – reinvented ourselves, not once but twice.

Can we do it again? I take the gist of Edgerton’s downbeat final chapters, on Britain’s recent post-Thatcherite demotion to offshore casino, to be a darkly sardonic suggestion that if we are to change course utterly yet again, then he wouldn’t start from here. But, at least, thanks to this rich and compelling book, we do now have a proper map and compass.

Colin Kidd is professor of history at the University of St Andrews

The Rise and Fall of the British Nation
David EdgertonAllen Lane, 682pp, £30